---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington D.C.
20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to ______

Commission file number: 000-28837

NEW JERSEY MINING
COMPANY(Exact name of registrant as specified in its
charter)

|Idaho                             | 82-0490295                          
|--------------------------------- | ------------------------------------
|(State or other jurisdiction      | (I.R.S. employer identification No.)
|of incorporation or organization) |                                     

89 Appleberg Road, Kellogg, Idaho
83837(Address of principal executive offices) (zip code)

(208) 783-3331Registrants telephone number,
including area code

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(D) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period as the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated
filer and small reporting company in Rule 12b-2 of the Exchange Act.

|Large Accelerated Filer | [ ] | Accelerated Filer         | [ ]  
|----------------------- | --- | ------------------------- | -----
|Non-Accelerated Filer   | [ ] | Smaller reporting company | [ x ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act) Yes [ ] No [X]

On July 31, 2009, 37,745,072 shares of the registrants common
stock were outstanding.

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NEW JERSEY MINING COMPANY QUARTERLY REPORT ON FORM
10-QFOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009

TABLE OF CONTENTS

|                                                                                                    | Page
|--------------------------------------------------------------------------------------------------- | ----
|PART I  FINANCIAL INFORMATION                                                                      |     
|Item 1: Financial Statements                                                                        | 3   
|Item 2: Managements Discussion and
      Analysis of Financial Condition and Results of Operations | 9   
|Item 3: Quantitative and Qualitative Disclosures
      about Market Risk                            | 12  
|Item 4: Controls and Procedures                                                                     | 12  
|Item 4T: Controls and Procedures                                                                    | 13  
|PART II  OTHER INFORMATION                                                                         |     
|Item 1: Legal Proceedings                                                                           | 13  
|Item 2: Unregistered Sales of Equity
      Securities and Use of Proceeds                           | 13  
|Item 3: Defaults Upon Senior Securities                                                             | 13  
|Item 4: Submission of Matters to a Vote
      of Security Holders                                   | 13  
|Item 5: Other Information                                                                           | 13  
|Item 6: Exhibits                                                                                    | 13  
|SIGNATURES                                                                                          | 14  

2

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PART I-FINANCIAL INFORMATION

Item 1: FINANCIAL STATEMENTS

|New Jersey Mining Company          
|-----------------------------------
|(A Development Stage Company)      
|Balance Sheets (Unaudited)         
|June 30, 2009 and December 31, 2008

|ASSETS                                                                |  
|--------------------------------------------------------------------- | -
|                                                                      |  
|                                                                      |  
|Current assets:                                                       |  
|Cash and cash equivalents                                             | $
|Investment in marketable equity security at
      market              |  
|(cost-June 30-$6,331, December 31-$6,531)                             |  
|Interest receivable                                                   |  
|Miscellaneous receivable                                              |  
|Contract drilling receivable                                          |  
|Prepaid expense                                                       |  
|Inventory                                                             |  
|Total current assets                                                  |  
|                                                                      |  
|Property, plant, and equipment, net of
      accumulated depreciation |  
|Mineral properties, net of accumulated amortization                   |  
|Reclamation bonds                                                     |  
|Total assets                                                          | $
|                                                                      |  
|                                                                      |  
|LIABILITIES AND
      STOCKHOLDERS EQUITY                            |  
|                                                                      |  
|Current liabilities:                                                  |  
|Accounts payable                                                      | $
|Accounts payable to related
      party                               |  
|Interest payable                                                      |  
|Accrued payroll and related
      payroll expenses                    |  
|Obligations under capital lease-current
      portion                 |  
|Notes payable-current portion                                         |  
|Total current liabilities                                             |  
|                                                                      |  
|Accrued reclamation costs                                             |  
|Obligations under capital lease-non-current                           |  
|Notes payable-non-current                                             |  
|                                                                      |  
|Total liabilities                                                     |  
|                                                                      |  
|Stockholders equity:                                                 |  
|Preferred stock, no par value,
      1,000,000 shares                 |  
|authorized;
      no shares issued and outstanding                    |  
|Common stock, no par value,
      50,000,000 shares authorized;       |  
|June 30,
      2009-37,741,642 and                                    |  
|December 31, 2008-37,160,392                                          |  
|shares
      issued and outstanding                                   |  
|Deficit accumulated during the
      development stage                |  
|Accumulated other comprehensive income                                |  
|Unrealized gain in marketable equity security                         |  
|Total stockholders equity                                            |  
|                                                                      |  
|Total
      liabilities and stockholders equity                      | $

3

The accompanying notes are an integral part of these
financial statements.

---

New Jersey Mining Company(A Development Stage
Company)Statements of Operations and Comprehensive Loss (Unaudited)
For the Three and Nine Month Periods Ended June 30, 2009 and 2008, And
from Inception (July 18, 1996) through June 30, 2009

|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   | From Inception  |  
|------------------------------------------------ | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | ---------- | - | - | --------------- | -
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   | (July 18, 1996) |  
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   | Through         |  
|                                                 |   | June 30, 2009 |   |   | June 30, 2008 |   |   | June 30, 2009 |  
|                                                 |   | Three Months  |   |   | Six Months    |   |   | Three Months  |   |   | Six Months |   |   |                 |  
|Income earned during the development stage:      |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Sales of gold                                    | $ | 52,338        |   | $ | 163,659       |   | $ |               |   | $ | 50,559     |   | $ | 313,374         |  
|Sales of concentrate                             |   |               |   |   |               |   |   |               |   |   |            |   |   | 601,168         |  
|Contract
      drilling income                   |   | 66,472        |   |   | 66,472        |   |   |               |   |   |            |   |   | 66,472          |  
|                                                 |   | 118,810       |   |   | 230,131       |   |   |               |   |   | 50,559     |   |   | 981,014         |  
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Cost and expenses:                               |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Direct
      production costs                    |   | 45,268        |   |   | 172,272       |   |   | 36,205        |   |   | 102,138    |   |   | 1,121,809       |  
|Management                                       |   | 90,787        |   |   | 187,070       |   |   | 67,127        |   |   | 134,200    |   |   | 1,467,053       |  
|Exploration                                      |   | 33,221        |   |   | 49,545        |   |   | 174,327       |   |   | 287,734    |   |   | 2,218,819       |  
|Contract drilling expense                        |   | 28,161        |   |   | 28,161        |   |   |               |   |   |            |   |   | 28,161          |  
|Gain on sale of
      mineral property           |   |               |   |   |               |   |   |               |   |   |            |   |   | (90,000         | )
|Gain on default of mineral                       |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|property sale                                    |   |               |   |   |               |   |   |               |   |   |            |   |   | (270,000        | )
|Depreciation and amortization                    |   | 38,080        |   |   | 85,603        |   |   | 52,544        |   |   | 105,160    |   |   | 630,231         |  
|General and
      administrative expenses        |   | 53,589        |   |   | 135,817       |   |   | 103,790       |   |   | 246,123    |   |   | 2,262,189       |  
|Total operating expenses                         |   | 289,106       |   |   | 658,468       |   |   | 433,993       |   |   | 875,355    |   |   | 7,368,262       |  
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Other (income) expense:                          |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Timber sales                                     |   |               |   |   |               |   |   |               |   |   |            |   |   | (54,699         | )
|Timber expense                                   |   |               |   |   |               |   |   |               |   |   |            |   |   | 14,554          |  
|Royalties and other income                       |   | (2            | ) |   | (2            | ) |   | (78           | ) |   | (1,344     | ) |   | (71,705         | )
|Royalty expense                                  |   | 2,484         |   |   | 3,597         |   |   |               |   |   | 656        |   |   | 37,870          |  
|Contract income                                  |   |               |   |   |               |   |   |               |   |   |            |   |   | 23,725          |  
|Gain on sale of
      marketable equity security |   | (1,912        | ) |   | (1,912        | ) |   |               |   |   |            |   |   | (72,021         | )
|Interest income                                  |   | (103          | ) |   | (437          | ) |   | (5,883        | ) |   | (9,445     | ) |   | (46,879         | )
|Interest expense                                 |   | 5,289         |   |   | 11,015        |   |   |               |   |   | 3,251      |   |   | 71,265          |  
|Write-off of goodwill                            |   |               |   |   |               |   |   |               |   |   |            |   |   | 30,950          |  
|Write-off of
      investment                    |   |               |   |   |               |   |   |               |   |   |            |   |   | 90,000          |  
|Total other (income) expense                     |   | 5,756         |   |   | 12,261        |   |   | (5,961        | ) |   | (6,882     | ) |   | (24,390         | )
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Net loss                                         |   | 176,052       |   |   | 440,598       |   |   | 428,032       |   |   | 817,914    |   |   | 6,362,858       |  
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Other comprehensive income:                      |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Unrealized
      (gain) loss on marketable       |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|equity security                                  |   | (10,821       | ) |   | (4,290        | ) |   | 171,444       |   |   | 293,904    |   |   | (14,087         | )
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Comprehensive loss                               | $ | 165,231       |   | $ | 436,308       |   | $ | 599,476       |   | $ | 1,111,818  |   | $ | 6,348,771       |  
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Net loss per common share-basic                  | $ | Nil           |   | $ | 0.01          |   | $ | 0.01          |   | $ | 0.02       |   | $ | 0.33            |  
|                                                 |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|Weighted average common shares                   |   |               |   |   |               |   |   |               |   |   |            |   |   |                 |  
|outstanding-basic                                |   | 37,506,523    |   |   | 37,347,938    |   |   | 36,112,686    |   |   | 34,825,639 |   |   | 19,460,858      |  

4

The accompanying notes are an integral part of these
financial statements.

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|New Jersey Mining Company                                     
|--------------------------------------------------------------
|(A Development Stage Company)                                 
|Statements of Cash Flows (Unaudited)                          
|For the Six Month Periods Ended June 30, 2009 and
      2008, 
|And from Inception (July 18, 1996) through June 30,
      2009

|                                                               |   |          |   |   |                 |   |   | From Inception |  
|-------------------------------------------------------------- | - | -------- | - | - | --------------- | - | - | -------------- | -
|                                                               |   | June 30, |   |   | (July 18, 1996) |  
|                                                               |   |          |   |   |                 |   |   | through        |  
|                                                               |   | 2009     |   |   | 2008            |   |   | June 30, 2009  |  
|Cash flows from operating activities:                          |   |          |   |   |                 |   |   |                |  
|Net loss                                                       | $ | (440,598 | ) | $ | (817,914        | ) | $ | (6,362,858     | )
|Adjustments to reconcile net loss to
      net cash            |   |          |   |   |                 |   |   |                |  
|used by operating
      activities:                            |   |          |   |   |                 |   |   |                |  
|Depreciation and amortization                                  |   | 85,603   |   |   | 105,160         |   |   | 630,231        |  
|Write-off of equipment                                         |   |          |   |   |                 |   |   | 11,272         |  
|Write-off
      of goodwill and investment                     |   |          |   |   |                 |   |   | 120,950        |  
|Gain on sale of mineral property                               |   |          |   |   |                 |   |   | (90,000        | )
|Gain on
      default of mineral property sale                 |   |          |   |   |                 |   |   | (270,000       | )
|Gain on sale of marketable equity securities                   |   | (1,912   | ) |   |                 |   |   | (72,021        | )
|Common stock issued for:                                       |   |          |   |   |                 |   |   |                |  
|Management and directors fees                                 |   | 145,698  |   |   | 38,700          |   |   | 920,735        |  
|Services
      and other                                       |   | 12,285   |   |   | 15,750          |   |   | 205,595        |  
|Exploration                                                    |   | 7,500    |   |   | 14,540          |   |   | 91,771         |  
|Mineral
      property agreement                               |   |          |   |   |                 |   |   | 15,000         |  
|Change in:                                                     |   |          |   |   |                 |   |   |                |  
|Prepaid
      expense                                          |   |          |   |   |                 |   |   | (572           | )
|Inventory                                                      |   | (41,680  | ) |   | 9,182           |   |   | (140,772       | )
|Miscellaneous receivable                                       |   | 5,516    |   |   | (1,673          | ) |   |                |  
|Interest receivable                                            |   | 221      |   |   | 873             |   |   | (103           | )
|Contract
      drilling receivable                             |   | (61,043  | ) |   |                 |   |   | (61,043        | )
|Other assets                                                   |   |          |   |   |                 |   |   | (778           | )
|Accounts
      payable                                         |   | 10,671   |   |   | 9,192           |   |   | 64,584         |  
|Accrued payroll and related payroll expenses                   |   | (28,102  | ) |   | 10,572          |   |   | 17,604         |  
|Accounts
      payable to related party                        |   | 63,200   |   |   |                 |   |   | 63,200         |  
|Interest payable                                               |   | 825      |   |   |                 |   |   | 825            |  
|Accrued
      reclamation costs                                |   |          |   |   |                 |   |   | 20,300         |  
|Net cash used by operating
      activities                    |   | (241,816 | ) |   | (615,618        | ) |   | (4,836,080     | )
|Cash flows from investing activities:                          |   |          |   |   |                 |   |   |                |  
|Purchases of property,
      plant, and equipment              |   | (4,392   | ) |   | (45,986         | ) |   | (1,084,248     | )
|Purchase of mineral property                                   |   |          |   |   |                 |   |   | (17,904        | )
|Proceeds from sale of
      mineral property                   |   |          |   |   |                 |   |   | 120,000        |  
|Deposit received on sale of mineral
      property             |   |          |   |   | 270,000         |   |   | 270,000        |  
|Purchase of reclamation
      bonds                            |   | (235     | ) |   | (536            | ) |   | (123,755       | )
|Purchase of marketable equity security                         |   |          |   |   |                 |   |   | (7,500         | )
|Proceeds from sales of
      marketable equity securities      |   | 2,112    |   |   |                 |   |   | 73,190         |  
|Cash of acquired companies                                     |   |          |   |   |                 |   |   | 38,269         |  
|Deferral of development
      costs                            |   |          |   |   | (157,947        | ) |   | (759,209       | )
|Net cash used by investing activities                          |   | (2,515   | ) |   | 65,531          |   |   | (1,491,157     | )
|Cash flows from financing activities:                          |   |          |   |   |                 |   |   |                |  
|Exercise of stock purchase warrants                            |   |          |   |   | 1,740,000       |   |   | 2,537,600      |  
|Sales of common stock,
      net of issuance costs             |   |          |   |   | 950             |   |   | 4,226,576      |  
|Principal payments on capital lease                            |   | (18,005  | ) |   | (19,378         | ) |   | (174,837       | )
|Principal payments on
      notes payable                      |   | (57,460  | ) |   | (58,074         | ) |   | (260,644       | )
|Net cash provided (used) by financing
      activities         |   | (75,465  | ) |   | 1,663,498       |   |   | 6,328,695      |  
|Net change in cash and cash equivalents                        |   | (319,796 | ) |   | 1,113,411       |   |   | 1,458          |  
|Cash and cash equivalents, beginning of period                 |   | 321,254  |   |   | 271,473         |   |   | 0              |  
|Cash and cash equivalents, end of period                       | $ | 1,458    |   | $ | 1,384,884       |   | $ | 1,458          |  
|                                                               |   |          |   |   |                 |   |   |                |  
|Supplemental disclosure of cash flow
      information:        |   |          |   |   |                 |   |   |                |  
|Interest paid in cash, net of amount capitalized               | $ | 10,190   |   | $ | 17,929          |   | $ | 61,076         |  
|Non-cash investing and financing
      activities:             |   |          |   |   |                 |   |   |                |  
|Common stock issued for:                                       |   |          |   |   |                 |   |   |                |  
|Property, plant, and equipment                                 |   |          |   | $ | 5,600           |   | $ | 50,365         |  
|Mineral
      properties                                       |   |          |   |   |                 |   | $ | 315,300        |  
|Payment of accounts payable                                    |   |          |   |   |                 |   | $ | 12,205         |  
|Acquisitions of companies, excluding cash                      |   |          |   |   |                 |   | $ | 743,653        |  
|Capital lease
      obligation incurred for equipment acquired |   |          |   |   |                 |   | $ | 178,588        |  
|Notes payable for property and
      equipment acquired        |   |          |   |   |                 |   | $ | 482,634        |  

5

The accompanying notes are an integral part of these
financial statements.

---

New Jersey Mining Company Notes to Financial Statements
(Unaudited)

1. Basis of Presentation:

These unaudited interim financial statements have been prepared
by New Jersey Mining Company (the Company) in accordance with accounting
principles generally accepted in the United States of America for interim
financial information, as well as the instructions to Form 10-Q. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of the Companys management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation of the interim
financial statements have been included.

The preparation of financial statements in accordance with
accounting principles generally accepted in the United States of America
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities known
to exist as of the date the financial statements are published, and the reported
amounts of revenues and expenses during the reporting period. Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of the
Company's financial statements; accordingly, it is possible that the actual
results could differ from these estimates and assumptions, which could have a
material effect on the reported amounts of the Company's financial position and
results of operations. Operating results for the six month period ended June 30,
2009, are not necessarily indicative of the results that may be expected for the
full year ending December 31, 2009.

For further information refer to the financial statements and
footnotes thereto in the Companys Annual Report on Form 10-K for the year ended
December 31, 2008.

The Company presents its financial statements in accordance
with Statement of Financial Accounting Standards (SFAS) No. 7, Accounting for
Development Stage Entities, as management believes that while the Companys
planned principal operations have commenced, the revenue generated from them is
not sufficient to cover all corporate costs. Additional development of the
Companys properties is necessary before a transition is made to reporting as a
production stage company.

2. Description of Business

The Company is an exploration stage company incorporated as an
Idaho corporation on July 18, 1996. The Company's primary business is exploring
for and developing gold, silver, and base metal mining resources in Idaho.

3. Going Concern

As shown in the accompanying financial statements, the Company
has minimal revenue and incurred an accumulated deficit of $6,362,858 through
June 30, 2009. These factors raise substantial doubt about the Companys ability
to continue as a going concern. Management intends to seek additional capital
from new equity securities offerings and joint venture agreements that will
provide funds needed to increase liquidity, fund internal growth and fully
implement its business plan.

The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.

Should the Company be unable to raise capital through future
private placements and/or joint venture agreements or achieve significant
revenues from its operations, its business, and, as a result, its financial
position, results of operations and cash flow will likely be materially
adversely impacted. We expect to receive cash flow from  gold sales and by
providing drilling services to Newmont on our joint venture.

6

---

4. Equity

Common Stock Issued for Cash, Goods, and
Services

The Company issued 166,660 and 319,660 shares respectively of
unregistered common stock to President Fred W. Brackebusch for management
services rendered in the three and six month periods ending June 30, 2009. The
shares were valued at $0.30 per share. The Company also issued 83,000 and
166,000 shares respectively of unregistered common stock to Vice President Grant
A. Brackebusch for management services rendered in the three and six month
periods ending June 30, 2009. The shares were valued at $0.30 per share.

During the three and six month periods ended June 30, 2009, the
Company issued 47,540 and 58,090 shares respectively of unregistered common
stock to individuals for goods and services at fair value prices ranging from
$0.20 to $0.30 per share.

During the three and six month periods ended June 30, 2009, the
Company issued 25,000 and 37,500 shares respectively of unregistered common
stock to individuals for exploration services. The shares were valued at
$0.20.

5. Fair Value Measurement

The table below sets forth our financial assets that were
accounted for at fair value at June 30, 2009 and December 31, 2008, and their
respective hierarchy level. We had no other financial assets or liabilities
accounted for at fair value at June 30, 2009 and December 31, 2008.

Balance at March 31, 2009
    Balance at December 31, 2008
    Hierarchy LevelInvestments in marketable equity securities
    $ 20,418
    $16,328
    Level 1Inventories
    140,773
    99,092
    Level 2


6. New Accounting Pronouncement

Effective June 30, 2009, we adopted the provisions of FASB
Staff Position (FSP) No. 107-1 and APB 28-1, issued to amend SFAS No. 107,
Disclosures about Fair Value of Financial instruments. This FSP requires
disclosures about fair value of financial instruments for interim reporting
periods as well as in annual financial statements. This FSP also amends APB
Opinion No. 28, Interim Financial Reporting, to require those disclosures in
summarized financial information at interim reporting periods. Adoption of this
guidance is not expected to have a material impact on our financial
statements.

Also on June 30, 2009 we adopted the provisions of FSP No. FAS
157-4, Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly. This FSP was issued to provide additional guidance for
estimating fair value in accordance with SFAS No. 157, Fair Value
Measurements, when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also provides guidance on
identifying circumstances that indicate a transaction is not orderly. Adoption
of this guidance is not expected to have a material impact on our financial
statements.

In May 2009, the FASB issued SFAS No. 165, Subsequent
Events (SFAS 165). SFAS 165 sets forth the period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may occur for potential recognition or disclosure in
the financial statements, the circumstances under which an entity should
recognize events or transactions occurring after the balance sheet date in its
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. SFAS 165 is
effective for interim or annual periods ending after June 15, 2009 and will be

7

---

applied prospectively. The adoption of SFAS 165 did not have a
material impact on the Companys results of operations or financial
position.

In June 2009, the FASB issued Statement of Financial Accounting
Standards No. 167,Amendments to FASB Interpretation No. 46(R) (SFAS
167), which modifies how a company determines when an entity that is
insufficiently capitalized or is not controlled through voting (or similar
rights) should be consolidated. SFAS 167 clarifies that the determination of
whether a company is required to consolidate an entity is based on, among other
things, an entitys purpose and design and a companys ability to direct the
activities of the entity that most significantly impact the entitys economic
performance. SFAS 167 requires an ongoing reassessment of whether a company is
the primary beneficiary of a variable interest entity. SFAS 167 also requires
additional disclosures about a companys involvement in variable interest
entities and any significant changes in risk exposure due to that involvement.
SFAS 167 is effective for fiscal years beginning after November 15, 2009.
Adoption of this guidance is not expected to have a material impact on our
financial statements.

In June 2009, the FASB issued Statement of Financial Accounting
Standards No. 168, The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles a Replacement of FASB Statement No.
162 (SFAS 168). This Standard establishes the FASB Accounting Standards
Codification (the Codification) as the source of authoritative accounting
principles recognized by the FASB to be applied by nongovernmental entities in
the preparation of financial statements in conformity with U.S. GAAP. The
Codification does not change current U.S. GAAP, but is intended to simplify user
access to all authoritative U.S. GAAP by providing all the authoritative
literature related to a particular topic in one place. The Codification is
effective for interim and annual periods ending after September 15, 2009, and as
of the effective date, all existing accounting standard documents will be
superseded. The Codification is effective for us in the third quarter of 2009,
and accordingly, our Quarterly Report on Form 10-Q for the quarter ending
September 30, 2009 and all subsequent public filings will reference the
Codification as the sole source of authoritative literature.

7. Mining Venture Agreements

Newmont Venture Agreement

The Company entered into a venture agreement with Newmont North
America Exploration Limited ("Newmont") in March 2008, relating to exploration
of the Company's Toboggan Project. Newmont is conducting exploration in a 38
square mile area centered on the prospects that the Company has staked. To earn
a participating interest in the Venture, Newmont is required to contribute
$2,000,000 in exploration expenditures as follows: $300,000 on or before March
2009, an additional $700,000 by March 2010, and an additional $1,000,000 by
March 2011. During 2009 NJMC is providing drilling services on a per footage fee
basis to Newmont for this project.

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Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

When we use the terms "New Jersey Mining Company," the
"Company," "we," "us," or "our," we are referring to New Jersey Mining Company
(the "Company") and its subsidiaries, unless the context otherwise requires.

Cautionary Statement about Forward-Looking
Statements

This Quarterly Report on Form 10-Q includes certain statements
that may be deemed to be "forward-looking statements." All statements, other
than statements of historical facts, included in this Form 10-Q that address
activities, events or developments that our management expects, believes or
anticipates will or may occur in the future are forward-looking statements. Such
forward-looking statements include discussion of such matters as:

- The amount and nature of future capital, development and exploration
  expenditures;
- The timing of exploration activities; and
- Business strategies and development of our business plan.

Forward-looking statements also typically include words such as
"anticipate," "estimate," "expect," "potential," "could" or similar words
suggesting future outcomes. These statements are based on certain assumptions
and analyses made by us in light of our experience and our perception of
historical trends, current conditions, expected future developments and other
factors we believe are appropriate in the circumstances. Such statements are
subject to a number of assumptions, risks and uncertainties, including such
factors as the volatility and level of metal prices, currency exchange rate
fluctuations, uncertainties in cash flow, expected acquisition benefits,
exploration mining and operating risks, competition, litigation, environmental
matters, the potential impact of government regulations, and other matters
related to the mining industry, many of which are beyond our control. Readers
are cautioned that forward-looking statements are not guarantees of future
performance and that actual results or developments may differ materially from
those expressed or implied in the forward-looking statements.

The Company is under no duty to update any of these
forward-looking statements after the date of this report. You should not place
undue reliance on these forward-looking statements.

Plan of Operation

The Companys strategy is to conduct exploration for gold,
silver and base metal deposits in the greater Coeur dAlene Mining District of
northern Idaho while concurrently conducting mining and mineral processing
operations on higher grade ore reserves it has located on its exploration
properties. The financial strategy is to generate cash from these operations to
pay for corporate expenses and to provide additional funds for exploration, thus
reducing the need to raise funds through financing activities including sale of
common stock. The strategy includes finding and developing ore reserves in order
to increase production of gold, silver, and base metals. In addition, the sale
or joint venture of mineral properties is used as a source of funds and to
reduce exploration costs.

The Company has several properties at which most exploration is
being conducted; the Toboggan Project, the Niagara, the Golden Chest, the Silver
Strand, the Coleman, and the Giant Ledge. The Toboggan Project is a group of
prospects in the Murray, Idaho District that appear to be related to alkaline
magmatism and contain gold and silver telluride minerals. The Toboggan Project
is being explored by Newmont North America Exploration Limited under a joint
venture agreement. Newmont is conducting exploration in a 38 square mile area
centered on the prospects that the Company has staked previously and on new
claims staked by Newmont. Newmont commenced drilling certain targets in the
second quarter of 2009. The Niagara copper-silver deposit, also located in the
Murray, Idaho area, in the Revett formation was drilled in the 1970s, and the
Company drilled 5 holes in 2008 which expanded the resource. When permitting is
completed and exploration funds are available, the Company will continue in-fill
drilling on the known resource and will drill to intercept a deeper stratabound
target in the Revett formation. At the Golden Chest mine, remnant mining was
completed during the quarter and the

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mine was placed on care and maintenance until financing is
available to complete development of reserves. Permits are in place and
development of infrastructure has been completed in order to be able to begin
production of silver-gold ore at the Silver Strand mine but because of lack of
working capital, it has been decided to not operate the mine in 2009. At the
Coleman underground mine, no work is planned in 2009.

The Company commenced core drilling operations in the second
quarter of 2009 at the Toboggan Project for Newmont.

The New Jersey mineral processing plant processed 607 dry
tonnes during the second quarter. The plant operated on a regular schedule of 4
days per week, 10 hours per day, processing ore from the Golden Chest mine. The
mill was idled during May 2009 except for the continued leaching and recovery of
gold from concentrates which should be completed during the third quarter.

Changes in Financial Condition

The Company maintains an adequate cash balance by increasing or
decreasing its exploration expenditures as limited by availability of cash from
operations or from financing activities. The cash balance at the end of the
second quarter of 2009 was $1,458, and Figure 1 shows the corresponding balances
for previous accounting periods.



The cash balance declined during the second quarter due to lack
of sales and financing activities.

Results of Operations

Income earned during the Development Stage (Revenue) for the
second quarter of 2009 was $118,810 including contract drilling income, gold
sales were $52,338 as compared to $0 for the second quarter of 2008. Figure 2
shows a net loss for the second quarter of 2009 of $176,052 compared to $428,032
for the second quarter of 2008.

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Gold production was 96 ounces in the second quarter of 2009 as
compared to 7 ounces for the comparable period of 2008. Gold production for the
remainder of 2009 is expected to decrease due to the lack of ore from the Golden
Chest mine.

Ore mining operations at the Golden Chest mine ended in May
2009 when all known remnants were mined. If financing can be obtained, ramp
access will be extended to the Idaho vein reserves. If the Idaho vein ramp
development can be completed there will be more than 200,000 tonnes
available.

Ore production at the Silver Strand mine has been delayed
indefinitely because of lack of working capital.

No capital expenditures are planned at the New Jersey mineral
processing plant.

The amount of money to be spent on exploration at the Companys
mines and prospects will depend upon the amount of gross profit generated by
operations and the amount of money raised by financing activities. Management
expects that all mines and the mineral processing plant will remain idle
indefinitely.

The Company started to drill for Newmont at the Toboggan
Project on a contract basis during the second quarter. It is expected that
drilling will continue through the third quarter. Newmont currently pays for all
exploration activities on the Toboggan Project.

For the remainder of 2009, the Company will continue to limit
its discretionary exploration expenditures as well as its overhead expenses.
With these reductions, the Company believes it will only need an estimated
$200,000 to continue operations through the next six months.

As shown in the accompanying financial statements, the Company
has minimal revenue and incurred an accumulated deficit of $6,362,858 through
June 30, 2009. These factors raise substantial doubt about the Companys ability
to continue as a going concern. Management intends to seek additional capital
from new equity securities offerings and joint venture agreements that will
provide funds needed to increase liquidity, fund internal growth and fully
implement its business plan.

The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.

Should the Company be unable to raise capital through future
private placements and/or joint venture agreements or achieve significant
revenues from its operations, its business, and, as a result, its financial
position, results of

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operations and cash flow will likely be materially adversely
impacted. We expect to receive cash flow from the gold sales and by providing
drilling services to Newmont on our joint venture.

Changes in Direct Production Costs

Direct production costs increased because milling activity was
more consistent in the three month period ended June 30, 2009 compared to the
comparable period last year. The increase was due to suspension of other
activities and concentration on mining accessible remnants at the Golden Chest
mine. Also, inventory increased for the period and the grade of the ore that was
mined resulted in costs that exceeded the current sale price.

Changes in Management Costs

Management expenses increased for the three month period ending
June 30, 2009 compared to the comparable period last year. The increase was due
to increased production activities and salaries. 50% of management salary was
paid in stock to help conserve available funds.

Changes in Exploration Costs

Exploration expenses decreased for the three month period
ending June 30, 2009 compared to the comparable period last year. The decrease
was due to a lack of discretionary funding being available.

Changes in General and Administrative Costs

General and administrative cost decreased for the three month
periods ending June 30, 2009 compared to the comparable period last year. The
Company decreased the number of its employees, and other costs were cut to
conserve available funds.

Changes in Contract Drilling Income and
Expense

Both contract drilling and expense increased because of the
companys drilling activities related to the Toboggan Project. This is the first
year for these activities.

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Not required for small reporting companies.

Item 4: CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Companys President and Chief Executive Officer who also
serves as the Companys principal financial officer, has evaluated the
effectiveness of the Companys disclosure controls and procedures pursuant to
Rule 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (the
Exchange Act), as of the end of the period covered by this report. Based on
such evaluation, the Companys President, Chief Executive Officer, and principal
financial officer has concluded that, as of the end of such period, the
Companys disclosure controls and procedures are effective in recording,
processing, summarizing, and reporting, on a timely basis, information required
to be disclosed by the Company in the reports that it files under the Exchange
Act.

Changes in internal control over financial
reporting.

The President, Chief Executive Officer, and principal financial
officer conducted evaluations of the Companys internal controls over financial
reporting to determine whether any changes occurred during the quarter ended
June 30, 2009 that have materially affected, or are reasonably likely to
materially affect, the Companys internal control over financial reporting. No
material changes in internal control over financial reporting occurred in the
quarter ended June 30, 2009.

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Item 4T. CONTROLS AND PROCEDURES

Information regarding internal control over financial reporting
has been set forth in Item 4.

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

Neither the constituent instruments defining the rights of the
Companys securities filers nor the rights evidenced by the Companys
outstanding common stock have been modified, limited or qualified.

The Company issued 166,660 shares of unregistered common stock
to President Fred W. Brackebusch for management services rendered on June 30,
2009. The shares were valued at a price of $0.30 per share. In managements
opinion, the securities were issued pursuant to exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.

The Company issued 83,000 shares of unregistered common stock
to Vice President Grant A. Brackebusch for management services rendered on June
30, 2009. The shares were valued at a price of $0.30 per share. In managements
opinion, the securities were issued pursuant to exemption from registration
under Section 4(2) of the Securities Act of 1933, as amended.

During the second quarter the Company issued 31,540 shares of
unregistered common stock at an average price of $0.22 to other accredited and
sophisticated individuals for goods and services, 16,000 shares priced at $0.20
to certain hourly employees for service awards during the quarter, and 25,000
shares valued at $0.20 for exploration services during the quarter. In
managements opinion, the securities were issued pursuant to exemptions from
registration under Section 4(2) of the Securities Act of 1933, as amended.

Item 3. DEFAULTS UPON SENIOR SECURITIES

The Company has no outstanding senior securities.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS

None

Item 5. OTHER INFORMATION

None

Item 6. EXHIBITS

|Number | Description                                                                                                                                                                               
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1    | Articles of Incorporation. Filed
      as an exhibit to the registrant's registration statement on Form 10- SB
      (Commission File No. 000-28837) and incorporated by reference herein.
|3.2    | Bylaws. Filed as an exhibit to the registrant's
      registration statement on Form 10-SB (Commission File No. 000-28837) and
      incorporated by reference herein.                    
|31.1   | Certification
      pursuant to Section 302 of the Sarbanes-Oxley act of 2002.                                                                                                            
|32.1   | Certification pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.                                                       

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SIGNATURES

Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.

| | NEW JERSEY MINING COMPANY
| | -------------------------
| |                          
| | By:                      
| |                          
| |                          
| |                          
| |                          
| |                          
| |                          
| | By:                      
| |                          
| |                          
| |                          
| |                          

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